My journey to a simpler life filled with riches

Archive for September, 2014

As you can see from the chart below, our current asset allocation is heavily skewed towards property, with 75% of our current portfolio under our management in this one asset class.

Don’t get me wrong, property has done very well for us over the years. Since the early 2000’s we’ve bought a total of seven properties but we’ve gradually been selling them off so we now have three remaining. We bought at the beginning of the boom years and the properties we hold have doubled or tripled in value since then.

We sense that this happy story may not continue for much longer and because house prices have increased faster than rents, the yield on the properties are not what they used to be. In fact, we can get just as good income from term deposits, without all the headaches.

So, in order to lock in some of the gains, reduce our risk if there is a property correction and to balance our portfolio a little, we’ve decide to sell one house. It will settle in October. Afterwards, our asset allocation will look like this:

You can see we are still heavily skewed in favour of property and cash, but a little more balanced than it currently is.

Over the next month, I intend to develop an investment plan to balance out our portfolio a little more.